BHP Billiton Plans Further Iron Ore Growth in Western Australia


This photo, taken in mid-2009, shows construction activity under way during the precommissioning phase at BHP
Billiton’s RGP4 iron ore expansion project in Western Australia. The company recently approved more than $1.9 billion
to carry out Rapid Growth Project 6 (RGP6), boosting future production capacity beyond the 205 million mt/y
volume provided by its RGP4/RGP5 expansions, to 240 million mt/y following completion of RGP6 in 2013. (Photo
courtesy BHP Billiton).
On January 29, BHP Billiton announced corporate approval for $1.93 billion in early expenditures on Rapid Growth Project 6 (RGP6) for continuing growth at its Western Australian iron ore operations. BHP Billiton’s share of the total will be $1.73 billion. The funding will allow early procurement of long-lead-time items and detailed engineering to continue the expansion of the inner harbor at Port Hedland, progress rail track duplication works, and expand the Jimblebar mining operation. Approval for the balance of the capital required for RGP6 will be considered during the second half of the 2010.

RGP6 is targeted for completion in 2013, at which time BHP Billiton’s installed iron ore capacity in Western Australia will stand at 240 million mt/y. BHP Billiton’s President–Iron Ore, Ian Ashby said, “This investment is the continuation of our long-term strategy of adding capacity in our high-quality iron ore business to support our confidence in the longer-term demand for iron ore globally. By the time RGP6 is completed, we will have more than tripled installed capacity at our Western Australia Iron Ore operations since we first invested in our accelerated growth program in 2002.”

RGP6 will add production capacity beyond goals already established for RGP4 announced in March 2007 and RGP5 announced in November 2008. RGP4 is scheduled for completion by the end of 2011, at which time the company’s installed iron ore capacity in Western Australia will reach 155 million mt/y. RGP5 will add 50 million mt/y to that total, lifting installed capacity to 205 million mt/y, with initial production from the expansion scheduled during 2011.

During its fiscal first half to the end of December 2009, BHP Billiton shipped 62.555 million mt of iron ore. (All production totals in this article are on a 100% basis. Minority partners in BHP Billiton’s Pilbara iron ore operations in Western Australia are Itochu Minerals & Energy of Australia Pty Ltd.; Mitsui-Itochu Iron Pty Ltd.; and Mitsui Iron Ore Corporation Pty Ltd. BHP Billiton owns 100% of the Jimblebar mining operation.)

On June 5, 2009, BHP Billiton and Rio Tinto signed an agreement of core principles to establish a production joint venture covering the entirety of both companies’ Western Australian iron ore assets. On December 5, 2009, the companies concluded binding agreements on the proposed joint venture that cover all aspects of how the joint venture will operate and be governed. Under the binding agreements, Rio Tinto will have the option to participate in RGP6 by paying its share of invested capital, with this decision being made after the joint-venture transaction is completed, currently estimated to occur in the second half of calendar 2010.

As featured in Womp 2010 Vol 02 - www.womp-int.com